Elon Musk is resorting to one of the oldest tricks in the book, robbing Peter to pay Paul, to boost demand for Cybertrucks.
Electrek reported on how Musk is using one of his companies, SpaceX, to help make up for a massive shortfall of a market for the controversial Cybertruck.
Tesla is facing challenges selling even 20,000 Cybertrucks annually, far below Musk’s initial projections of 500,000, per Electrek’s analysis. As a result, Tesla is left with large stockpiles of the vehicles even as they’ve heavily reduced their production.
Making a small dent in the inventory is SpaceX. The company has already bought over 1,000 Cybertrucks with room to double its fleet. An X user shared a video of a lot teeming with the vehicles.
At a starting retail price of $80,000, SpaceX’s purchases could add up to anywhere between $80 million to $160 million in sales for Tesla.
As Electrek pointed out, there is nothing illegal about Musk’s machinations here. Still, essentially having to bail out a failing product isn’t good news for Tesla nor the best move for SpaceX.
Investors certainly should be concerned that Musk’s moves here are self-serving. There’s also the matter of SpaceX receiving large help from the government, and then turning around and buying Cybertrucks.
“In other words, government subsidies that were meant to get us back to the moon are being used to buy unsellable trucks that look like big dumpsters,” a frustrated commenter on Electrek opined.
Musk’s struggles in moving Cybertrucks provide another example of overpromising and underdelivering. Before it was released, the vehicle had over one million reservations. Only a mere 60,000 of those were converted into sales.
Electrek chalked up that failure to consumers picking up on a bait-and-switch from Tesla after unveiling their 2019 prototype. The actual Cybertruck is more expensive, has less range, and boasts fewer attractive features.
The vehicle is just one of the concerning issues for Tesla, which is dealing with ascendant Chinese EV brands like BYD. It’s also facing challenges in the U.S. market prompted by the Trump administration’s anti-EV moves.
Ultimately, Musk has a lot of latitude to do what he wants, considering how much shareholders value him. They approved his massive new pay package with Tesla, despite the brand’s myriad of issues including struggling sales numbers.
SpaceX is becoming the biggest source of Musk’s wealth. It could be the company that pushes his net worth over a trillion dollars.
Until shareholders impact his bottom line, it’s unlikely Musk will stop using his companies to enrich himself and sidestep problems. A commenter on Electrek speculated that this maneuver is probably far from an isolated one.
“You have to wonder what other tricks they pulled in the last quarter in order to pad their already abysmal sales,” they wrote.
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